The Ohio State University s4

The Ohio State University Fisher College of Business M&L 7202 - Consumer Behavior Spring 2016

TR 10:15 AM – 11:45 AM Gerlach Hall 0305

Professor: Dr. Rebecca Walker Reczek

Email and Twitter: reczek.3@ osu.edu @Rebecca_Reczek

Office: 538 Fisher Hall

Phone: (614) 247-6433 (office); (614) 961-8987 (cell)

Office hours: Tuesdays and Thursdays, Noon – 1 PM and by appointment

Course Objectives

Contemporary approaches to business emphasize the importance of adopting a consumer focus. Marketing, in particular, is a customer-driven function that begins and ends with the consumer— from recognizing his or her needs to ensuring post-purchase satisfaction and loyalty. This is the first of two courses designed to enhance your understanding of how and why people choose, use, and evaluate goods and services the way they do.

While all of us are consumers, our intuitions about our own behavior as well as that of others are often inaccurate. In this class we will use theories developed in marketing, psychology, and other behavioral sciences to better predict how consumers will respond to different marketing activities.

This course will primarily focus on the process of consumer decision making and the outcomes associated with those decisions. The follow-up course, “Consumer Psychology,” will delve deeper into core psychological processes (e.g., perception, categorization, inference making, attitudes, learning, and memory) as they relate to consumer behavior.

Course Format

We will use several different kinds of materials and approaches in this course to illustrate consumer behavior phenomena and to get us thinking about the managerial implications of those findings. Material will be presented in lectures, discussions, articles, videos, cases, etc. We will apply relevant theories and research to real-world consumer behavior problems. Learning Objectives

The primary objective of this course is to provide key tools and frameworks for analyzing consumer behavior in order to solve marketing problems and define effective marketing strategies.

Specifically, you will:  Appreciate the importance of consumer analyses to the design, implementation, and evaluation of successful marketing strategies and programs.  Learn about relevant theories and research from the behavioral sciences (e.g., psychology, sociology, economics) that can help marketers understand and influence consumer behavior.  Apply consumer behavior research when developing and evaluating marketing strategies.  Understand the strengths and limitations of specific, often competing theories for interpreting particular consumer issues.  Improve your abilities to discover original consumer insights that go beyond surface-level intuitions.

Course Policies

 Attendance is expected. Your ability to benefit from the course and contribute to the class is largely dependent upon your attendance during class meetings. If you cannot attend class, you will be responsible for everything covered or announced in class.  The classroom is a professional learning environment, and students’ in-class behaviors should reflect this. Intrusive classroom exits and entrances, systematic tardiness, use of laptop computers for email correspondence/checking Facebook, and text messaging are rude, disruptive, and discouraged.  We should all try to make the classroom atmosphere as congenial as possible to allow everybody to contribute to the class. This does not, however, mean that you must agree with every comment offered by your classmates or the professor (i.e., it’s ok to disagree with me and your classmates as long as it’s done in a civil and constructive manner).  You should come to class ready to discuss the assignment for the day, be it a reading, an assignment you are turning in, a case, etc.  Late assignments will not be accepted. The only exceptions are for documented emergencies.

Communication

The best way to reach me outside class is via email. I access my email many times a day – much more often than I check my phone messages. If you cannot attend my officially scheduled office hours, you can also always email me to set up an appointment at a different time that works with your schedule. I will use Carmen’s email system to contact you individually or as a group about the class (e.g., changes in the syllabus, assignments, etc.). It is your responsibility to make sure that emails sent via Carmen reach you at an email address you check on a regular basis. Course Materials

Course Pack (Required)

There is a required Xanedu Course Pack for this course. However, whenever I can find a reading online, it is NOT in the course pack. These readings are, for the most part free, with the exception of a few Harvard Business Review items that you will have to pay for separately. See Syllabus Supplement for a list of all readings and accompanying discussion questions.

Additional Readings (Recommended based on interest)

There are many text books and popular press book titles that cover issues related to our class discussions. We will be reading excerpts from a number of these during the term. I am also happy to recommend additional books beyond the ones listed.

My first recommendation is a comprehensive consumer behavior text book that you may wish to purchase as a supplement to your course pack. It will also come in handy if you decide to take Consumer Psychology as an elective:

 Hoyer, Wayne D., MacInnis, Deborah J., and Rik Pieters (2013), Consumer Behavior, 6th edition. Cengage Learning.

I also highly recommend these books that we will be reading excerpts from during the term or that touch on topics we will cover during the term (you are not required to purchase these, but you may wish to do so for your own, independent reading):

 Ariely, Dan (2008), Predictably Irrational: The Hidden Forces that Shape our Decisions, Harper Collins.  Ariely, Dan (2010), The Upside of Irrationality: The Unexpected Benefits of Defying Logic, Harper Collins.  Belsky, Gary and Thomas Gilovich (2000), Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the New Science of Behavioral Economics, Simon and Shuster.  Berger, Jonah (2013), Contagious: Why Things Catch On, Simon and Shuster  Brennen, Bridge (2009), Why She Buys, Crown Business.  Cialdini, Robert (2006), Influence: The Psychology of Persuasion, Collins.  Gladwell, Malcolm (2007), Blink: The Power of Thinking without Thinking, Back Bay Books.  Iyengar, Sheena (2011), The Art of Choosing, Twelve.  Kahneman, Daniel (2011), Thinking Fast and Slow, Farrar, Straus and Giroux.  Schwartz, Barry (2004), The Paradox of Choice: Why More is Less, Harper Collins  Thaler, Richard H. and Cass Sunstein (2009), Nudge: Improving Decisions about Health, Wealth, and Happiness, Penguin.  Underhill, Paco (2009), Why We Buy: The Science of Shopping: Updated and Revised for the Internet, the Global Consumer, and Beyond, Simon & Schuster.

Assessment

As required by Fisher policy, grading will be based on relative rather than absolute standards. The average grade in this course will be a 3.6 or lower. A “B” (3.00) average in core courses and overall is required to earn a Fisher MBA degree from The Ohio State University.

The final grade will be determined by your score on four assessment tools: Exam (individual grade) 35% Field Project Report I: Depth Interviews (team grade) 20% Field Project Report II: Customer Journey Map and Presentation (team) 25% Individual Participation (individual grade) 20% 100%

Keep in mind that Fisher’s grading policy means that final grades will be determined at the end of the course once all grades are available for all students, so your grade on any individual assignment may not be diagnostic of your final grade.

One exam will be held during the term at the time allocated to our course by the GPO. It will be an essay-based cumulative exam over all material covered during the term. The exam will be open book/open notes. Students are NOT allowed to collaborate on the exam – your work must be solely your own. See the exam review sheet on Carmen for more details (including sample questions).

Consumer Behavior Field Project (more details will be provided in class and on Carmen)

This project will provide a hands-on opportunity to understand consumer behavior. In teams comprised of 4-6 members, students will investigate a consumer issue using a two-step process involving: (1) qualitative depth interviews and (2) designing and fielding a survey to develop a “customer journey map” that provides recommendations for addressing identified “pain points” and capitalizing on “moments of truth” that directly impact engagement, experience, satisfaction, etc. You will form your own teams.

In part I of the field project, you will conduct depth interviews about three different types of purchases and then use these interviews to analyze how the decision process differs for high and low involvement purchases, as well as for hedonic versus utilitarian purchases. To complete part II, you will select a brand from one of the product categories you explored in part I for which to develop your customer journey map. This brand is the “client” for whom you are developing recommendations. The scope and sample size for part II make it similar to typical, exploratory consumer research projects that marketing departments regularly commission and field. You will summarize your interview insights in a first report and your survey results, customer journey map, and client recommendations in a second report. All teams will present their customer journey map and recommendations in class. Individual Participation

Your participation grade will be determined by two components: (1) in-class contribution and attendance (since you must be here to contribute) and (2) contribution to your team’s field project.

In-Class Contribution. In-class contribution will be assessed based on the quality and consistency of your contributions to the in-class discussions. You are neither expected to have all the right answers in every class, nor to dominate every in-class discussion. However, you are required to be prepared and contribute regularly. The quality of our class discussions depends on how well prepared you are and your willingness to share the results of your preparation with the class. This means that the quality of your contributions is a lot more important than the quantity. It is entirely possible that you can talk a lot and receive a low grade for in-class contribution. When evaluating your contribution to the class discussions, factors such as the following are considered:

 Does the participant attend class regularly and come to class on time? Is the participant prepared?  Do comments add insight to our understanding of the marketing concept, the problem, or situation or are others left with a “so what” feeling?  Do comments generate discussion by yielding a new perspective?  Is the participant a good listener? Are comments timely and do they advance the comments recently made by others? Are they linked to the comments of others? Is there a willingness to interact with other class members?

If you do not participate in class, you will (obviously) not receive a high participation grade.

Field Project Contributions.

Your contributions with respect to your team’s field project reports and presentation will also be a factor in assessing participation. To assess contribution, I will ask you to upload a peer evaluation from to Carmen’s Dropbox assessing your own contribution and that of your team members. These forms are confidential and will not be shared with your team members.

Please note that I will also ask you to evaluate all of the other team’s presentations. Turning in evaluations of all field project presentations (i.e., your ratings of other teams’ presentations) also represents an important part of your contribution to the overall field project experience. You can view the “Audience Feedback” form on Carmen, but you are not required to print these out – I will bring enough for everyone to fill out and turn in on the presentation days. Disability Statement

Any student who feels s/he may need an accommodation based on the impact of a disability should contact the instructor privately to discuss their specific needs. Please contact the Office for Disability Services at 614-292-3307 in room 150 Pomerene Hall; they coordinate reasonable accommodations for students with documented disabilities.

Academic Integrity

Academic integrity is essential to maintaining an environment that fosters excellence in teaching, research, and other educational and scholarly activities. Thus, The Ohio State University and the Committee on Academic Misconduct (COAM) expect that all students have read and understand the University’s Code of Student Conduct, and that all students will complete all academic and scholarly assignments with fairness and honesty. Students must recognize that failure to follow the rules and guidelines established in the University’s Code of Student Conduct and this syllabus may constitute “Academic Misconduct.”

The Ohio State University’s Code of Student Conduct (Section 3335-23-04) defines academic misconduct as: “Any activity that tends to compromise the academic integrity of the University, or subvert the educational process.” Examples of academic misconduct include (but are not limited to) plagiarism, collusion (unauthorized collaboration), copying the work of another student, and possession of unauthorized materials during an examination. Ignorance of the University’s Code of Student Conduct is never considered an “excuse” for academic misconduct, so I recommend that you review the Code of Student Conduct and, specifically, the sections dealing with academic misconduct.

If I suspect that a student has committed academic misconduct in this course, I am obligated by University Rules to report my suspicions to the Committee on Academic Misconduct. If COAM determines that you have violated the University’s Code of Student Conduct (i.e., committed academic misconduct), the sanctions for the misconduct could include a failing grade in this course and suspension or dismissal from the University.

If you have any questions about the above policy or what constitutes academic misconduct in this course, please contact me.

Other sources of information on academic misconduct (integrity):

 The Committee on Academic Misconduct web pages (COAM Home)  Ten Suggestions for Preserving Academic Integrity (Ten Suggestions) Fisher MBA Honor Code

As a member of the Fisher College of Business community, I am personally committed to the highest standards of ethical behavior. Becoming a leader comes with great responsibility and I am ever mindful of my actions and the impact they have on my community. I hold myself to the highest standards and will adhere to the following tenets:

Act with Honor – My actions will be guided by what is honorable and moral, and not just what leads to success. I pledge to act with honor and integrity in both my academic and professional career, as well as in my social life.

Respect for All – I understand that we live in a large and diverse community, and as a member, I acknowledge the richness of this community and pledge to be inclusive and respectful of one and all. I will be civil and courteous in my words and actions toward others.

Give Back – I recognize that I would not be successful without the help of so many others. Implicit in this belief is my responsibility to help others reach their own goals and ideals. As a leader in the community and business environment, I pledge to live by these principles and celebrate those who share these ideals.

Expectations from the Fisher Community

1. Behave with Honesty and Integrity 2. Demonstrate a Strong Work Ethic 3. Show Respect towards Faculty, Staff and Peers, Inside and Outside the Classroom 4. Nurture and Develop the Potential in You 5. Nurture and Develop the Potential in Others 6. Take Responsibility for your Actions and Inactions 7. Represent Yourself and Fisher Well

COURSE CALENDAR*

*Calendar is subject to change at the instructor’s discretion. All changes will be discussed in advance of the day affected. Day Date Topic Assignment Due

Lecture 1: What is Consumer Read materials for Lecture 1 Thursday 3/3 Behavior/How to Study Consumer Behavior “Assignment” Due: Picture of you uploaded to Carmen Dropbox by 3/8 Tuesday 3/8 Lecture 1 continued

Lecture 2: Motivation, Ability, and Read materials for Lecture 2 Thursday 3/10 Opportunity

SPRING BREAK (NO CLASS ON 3/15 OR 3/17)

Sign up for Field Project teams Tuesday 3/22 Lecture 2 continued in class on 3/22 (4-6 members)

Case: Boston Beer Company (BBC), Light Beer Decision Read materials for BBC case Thursday 3/24 (including supplemental materials Go Over Part I of Field Project on depth interviews) (Depth Interviews) in Class

Lecture 3: Consumer Decision Making (Five-step Decision Making Tuesday 3/29 Process, Information Search, Decision Rules) Read materials for Lecture 3

Read materials on Customer Lecture 3 continued Journey Mapping Thursday 3/31 Go Over Part II of Field Project (Customer Journey Map) in Class

Lecture 4: Heuristics and Biases and Read materials for Lecture 4 Tuesday 4/5 Context Effects in Decision Making Turn in hard copies of Field Thursday 4/7 Project Report I (Depth Lecture 4 continued Interviews) at beginning of class on 4/5 (one per team) 4/12 Read materials for Lecture 5 Tuesday Lecture 5: Post-Decision Processes

Lecture 6: Social and Interpersonal Thursday 4/14 Read materials for Lecture 6 Influences on Decision Making

Field Project Presentations for first 40 minutes of class; Leave at 11:40 AM to go to Ford CMO Turn in audience feedback presentation at Noon Tuesday 4/19 forms on all presentations at end of both presentation days. (NOTE: office hours cancelled today since we will all be at the talk during NOTE: These forms are not normal office hours – email to set up anonymous or confidential, so be alternate time if you need to see me) constructive in the feedback you give your classmates. Remaining Field Project Thursday 4/21 Presentations

Turn in hard copies of Field Project Report II (Customer Journey Map) to my office by 5 PM (one per team) Monday 4/25 - Upload Field Project Peer Evaluation Forms to Carmen Dropbox by 5 PM (one per individual)

You may type or write your exam Exam in Gerlach 305 at 10:15 AM – feel free to bring a laptop. If you Thursday 4/28 choose to type, you will simply email me your exam at the end of the exam period. Syllabus Supplement: Required Readings and Discussion Questions

Class Procedure on Non-case Days:

With the exception of the first lecture and the case discussion day, for each lecture you will have two types of readings and two types of discussion questions to prepare. I will not ask you to turn in written answers to these questions, but it is in your best interest to have prepared good answers, as these questions will be used to guide our discussion of the topic for the day. Both types of questions will also assist you in studying for the exam at the end of the term.

Readings to Illustrate Key Concepts for Lecture. These are readings that will introduce the key topics/concepts for the lecture and that will help you answer the general “Discussion Questions” for the lecture. Please note that while these readings should help guide you in answering the Discussion Questions, I also encourage you to use your own experience, both your past work experience and your experience as a consumer, in answering these questions.

Focal Readings. These are readings that we will spend time in class specifically discussing; depending on the reading, these discussions will typically be 5-15 minutes long and will be guided by the “Focal Reading Questions,” which relate directly to the focal article/book chapter. In most cases, these readings deal with a specific company, brand, or marketing decision and can be thought of as “mini-cases.”

Case Discussion Day:

Your primary reading for a case day will obviously be the case (and potentially additional supplementary reading). “Case Study Questions” are provided instead of discussion questions. These questions are provided to help you prepare the case. Like the discussion and focal reading questions, I will not ask you to turn these in, but it is in your best interest to prepare good answers to these questions, as they will help guide the case discussion.

A note on accessing readings not in the Course Pack:

 I have only put readings in the Course Pack that are not available online. In the syllabus, I have either given you a link to the article or indicated next to it if it is in the Course Pack, available through the OSU library website, or through the HBR website.

 For articles that are available for free online, I have tried to provide you with a working link. If the link does NOT work, try Googling the citation or try searching for the article on the library website. If you still cannot access a reading after trying all of these options, please let me know ASAP.

 For articles available through the OSU library website, I recommend you go to the “Research and Databases” link (http://library.ohio-state.edu/screens/databases.html), then to “Business Source Complete” and search from there. Lecture 1: What is Consumer Behavior/The Study of Consumer Behavior

Readings to Illustrate Key Concepts for Lecture:

Overview of Qualitative Consumer Behavior Research Methods (good overview; please read this first):

• Mittal, Vikas (2015), “Qualitative Research for Customer-Focused Insights.” Available at SSRN: http://ssrn.com/abstract=2682846

Focus Groups:

• Vega, Tanzina (2011), “Focus Groups That Look Like Play Groups,” Wall Street Journal, May 29: http://www.nytimes.com/2011/05/30/business/media/30focus.html? pagewanted=all

Observational and Ethnographic Research:

• Wasserman, Todd (2003), “Sharpening the Focus,” Brandweek, November 3, pp. 28-32. *Available through OSU library website. • McFarland, Jennifer (2001), “Margaret Mead Meets Consumer Fieldwork,” Harvard Management Update, September: http://hbswk.hbs.edu/archive/2514.html

Data Mining:

• Stein, Joel (2011), “Data Mining: How Companies Now Know Everything about You,” Time, March 10: http://www.time.com/time/magazine/article/0,9171,2058205,00.html

Test Markets:

• Sullivan, Michelle (2015), “How Columbus Became America’s Test Market City,” Columbus Monthly, January: http://www.columbusmonthly.com/content/stories/2015/01/how-columbus-became- americas-test-market.html

Consumer Behavior Experiments:

• Anderson, Eric and Duncan Simester (2011), “A Step-by-Step Guide to Smart Business Experiments,” Harvard Business Review, 89 (March), 98-105. https://hbr.org/2011/03/a-step-by-step-guide-to-smart-business-experiments • Gallo, Amy (2016), “A Refresher on Statistical Significance,” Harvard Business Review, February 16 (online article): https://hbr.org/2016/02/a-refresher-on- statistical-significance Lecture 2: Motivation, Ability, and Opportunity

Discussion Questions for Lecture:

• Why do some consumers find an ad interesting and engaging while others completely ignore the same ad? • How do marketing managers use an understanding of consumers’ needs in developing marketing strategy? • Even if consumers are extremely motivated to process information about a product/brand and/or are motivated to buy that product/brand, what factors might prevent them from doing so?

• Reynolds, Thomas J. and Jonathan Gutman (1988), “Laddering Theory, Method, Analysis, and Interpretation,” Journal of Advertising Research, 23 (1), 11-31. *Available through OSU library website.

Focal Reading for Lecture: Brennan, Bridget (2009), Chapter 4 in Why She Buys, “Pink is Not a Strategy,” pp. 143-159. *In Course Pack.

Focal Reading Questions:

 How does observing consumers in their homes help P&G marketers gain insight into women’s needs? How are the insights obtained different from what could be obtained through survey-based research?  What needs does the Swiffer fulfill? Are these needs functional or emotional?  The author proposes that Venus razors fulfill both functional and emotional needs. What are the strategic advantages of fulfilling both types of needs? Case: Boston Beer Company

Case Study Questions:

• How would core Sam Adams customers respond to a light beer push? • Should Boston Beer attack the light beer market? If yes, why and how? If no, why and what should they do instead? • What is the specific contribution of each form of market research to your recommendation in the question above (i.e., specifically, what did you take away from the taste tests, ZMETs, consumption data, etc.)? • If we were to enter to enter the market, what proposal would you make (name, label, bottle color, taste, target customer, target competitor, etc.)? • What questions would you need answered in order to decide whether to move forward with your recommendations?

Case: Cyr, Linda A., Joseph B. Lassiter, and Michael J. Roberts (1998; revised 2001), “Boston Beer Co: Light Beer Decision,” Harvard Business Publishing. *Available for purchase at Harvard website.

Supplemental Material:

• Zaltman, Gerald (1998), “ZMET Research Process,” Harvard Business Publishing. *Available for purchase at Harvard website. • Deighton, John and Susan Fournier (1997), “Consumer Behavior Exercise (A),” Harvard Business Publishing. *Available for purchase at Harvard website. *This consumer behavior exercise will serve as a guide in completing the depth interview portion of your field project. We will discuss the details of the project in class. Lecture 3: Consumer Decision Making (Five-step Decision Making Process, Information Search, Decision Rules):

• Where do consumers search for information about products/brands? What type of information do consumers search for? • What biases can affect consumers’ information search? • Do you think consumers really use the decision rules you read about? Why or why not? If so, what does it look like in the “real world?”

• Schwartz, Barry (2004), Chapter 3 in The Paradox of Choice: Why More is Less, Chapter 3, “Deciding and Choosing,” pp. 52-61. *In Course Pack. • Graham, Judy (2010), Section IX in Critical Thinking in Consumer Behavior: Cases and Experimental Exercises, 2nd edition, “Decision Rules I and II” pp. 132-138. *In Course Pack. *This is a mini-case that provides exercises for you to work through – please actually work through these exercises. If you have questions about them, we can go over them in class.

Focal Readings for Lecture:

• Court, David, Elzinga, Dave, Mulder, Susan and Ole Jorgen Vetvik (2009), “The Consumer Decision Journey,” McKinsey Quarterly, Issue 3, 96-107. http://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the- consumer-decision-journey

Focal Reading Questions for Lecture:

• What are the key differences between the funnel metaphor for understanding consumer decision making and the circular “journey” the authors propose? • What is a “touch point”? • When and why are consumer-driven touch points important in the consumer decision journey described by the authors? • In what ways does the consumer decision journey model do a good job of “modernizing” the way we think about consumer decision making to reflect the realities of today’s market? Are the authors missing any key points? Lecture 3 Materials on Customer Journey Mapping (will be discussed on day 2 of this lecture):

These blog posts will serve as a guide in developing your Customer Journey Maps for part II of the field project. We will discuss details of the project in class.

Richardson, Adam (Fall 2010), Harvard Business School Blogs.

 Understanding Customer Experience: http://blogs.hbr.org/cs/2010/10/understanding_customer_experie.html

 Using Customer Journey Maps to Improve a Customer Experience: http://blogs.hbr.org/cs/2010/11/using_customer_journey_maps_to.html

 Touchpoints Bring the Customer Experience to Life: http://blogs.hbr.org/cs/2010/12/touchpoints_bring_the_customer.html

This article will be helpful in developing recommendations for your client based on your journey analysis.

Edelman, David and Marc Singer (2015), “Competing on Customer Journeys,” Harvard Business Review, November issue: https://hbr.org/2015/11/competing-on-customer- journeys *Also available through OSU library website. Lecture 4: Context Effects and Heuristics and Biases in Decision Making

• Why do consumers use “rules of thumb” to make decisions? • Anchoring, which you’ll read about in more than one of today’s readings, is one of the three original heuristics identified in the heuristics and biases approach to studying human decision making. Explain the other two. • After reading about prospect theory and reading the excerpts from Predictably Irrational, one can easily argue that most consumers don’t always make rational decisions. As a marketer, how do you feel about using this knowledge of how consumers make decisions to sell products? Is it exploitative? Are you “tricking” the consumer? Or is it just good business? • What about the government using behavioral science to “nudge” people (see HBR reading on US government embracing behavioral science)

• Thaler, Richard H. and Cass Sunstein (2009), Chapter 1 in Nudge: Improving Decisions about Health, Wealth, and Happiness, “Biases and Blunders,” pp. 17-31. *In Course Pack • Belsky, Gary and Thomas Gilovich (2000), Chapter 2 in Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the New Science of Behavioral Economics, “When Six of One Isn’t Half a Dozen of the Other,” pp. 51- 59. *In Course Pack • Carey, Benedict (2012), "That Guy Won? Why We Knew It All Along," The New York Times, October 29. http://www.nytimes.com/2012/10/30/health/he-won-the- election-i-knew-it-all-along.html?pagewanted=all • Lehrer, Jonathan (2012), "Why Smart People are Stupid," The New Yorker, June 12. http://www.newyorker.com/online/blogs/frontal-cortex/2012/06/daniel- kahneman-bias-studies.html • Gino, Francesca (2015), “Why the U.S. Government is Embracing Behavioral Science,” Harvard Business Review (online article, September 18): https://hbr.org/2015/09/why-the-u-s-government-is-embracing-behavioral-science

Focal Reading for Lecture: Ariely, Dan (2008), Chapters 1 and 2 in Predictably Irrational: The Hidden Forces that Shape our Decisions, “The Truth About Relativity,” pp. 1-8 and “The Fallacy of Supply and Demand,” pp. 25-33. *In Course Pack

Focal Reading Questions for Lecture:

• What does Ariely mean when he says “most people don’t know what they want unless they see it in context”? • About 10 years ago, when Williams Sonoma first introduced a home “bread bakery” machine for $275, most consumers were not interested. How could you use a decoy option to increase sales of this bread unit? (I will tell you in class what William Sonoma actually did, but try to figure this out without browsing their website). • How would you use the concept of anchoring when pricing a new product? Lecture 5: Post-Decision Processes

• Why do marketers care what happens after the sale? • Why is customer satisfaction important? • Why should marketers care about how/why/when consumers dispose of goods?

• Schwartz, Barry (2004), Chapter 4 in The Paradox of Choice: Why More is Less, Chapter 3, “When Only the Best Will Do,” pp. 77-96. *In Course Pack • Casey, Michael (2015), “Is the Fast Fashion Industry Ready to Change its Wasteful Ways?” CBS News (November 27): http://www.cbsnews.com/news/is-the- fast-fashion-industry-ready-to-change-its-wasteful-ways/

Focal Readings for Lecture: Tugend, Alina (2010), “Too Many Choices: A Problem That Can Paralyze,” New York Times, February 26. http://www.nytimes.com/2010/02/27/your- money/27shortcuts.html

• Why are “too many choices” potentially problematic for (1) consumers and (2) marketers? • What can marketers do to minimize both anticipated and post-purchase regret? • The author of this article writes “Even though we now have the capacity, via the Internet, to research choices endlessly, it doesn’t mean we should.” Do you agree or disagree? Why? Lecture 6: Social and Interpersonal Influences on Consumer Decision Making

• Why do people “follow the herd”? That is, why do they conform to what others do and/or to society’s expectations? • How can marketers use the principles of persuasion you read about to persuade consumers to comply with their requests (which are typically to buy their product/service, but you can also think about other requests a retailer or marketing manager might make of current or potential customers)? • For what types of products/services is word-of-mouth most likely to occur naturally?

• Thaler, Richard H. and Cass Sunstein (2009), Chapter 3 in Nudge: Improving Decisions about Health, Wealth, and Happiness, “Following the Herd,” pp. 53-73. *In Course Pack • Cialdini, Robert B. (2001), “Harness the Science of Persuasion,” Harvard Business Review, 79 (9), 72-29. *Available through OSU library website.

Focal Reading for Lecture: Bughin, Jacques, Jonathan Doogan, and Ole Jorgen Vetvik (2010), “A New Way to Measure Word of Mouth Marketing,” McKinsey Quarterly, Issue 2, pp. 113-116. http://www.mckinsey.com/business-functions/marketing-and-sales/our- insights/a-new-way-to-measure-word-of-mouth-marketing

• What is word-of-mouth? What forms can it take? • When (i.e., for what types of purchases and in what types of situations) is word- of-mouth most important to consumers? • How can marketers encourage the three types of word-of-mouth described in the article: (1) experiential, (2) consequential, and (3) intentional? • Word-of-mouth is often perceived by consumers as more reliable/trustworthy than traditional marketing. Do you think this is objectively the case?